EXHIBIT 10(b)
MODIFICATION AGREEMENT
THIS AGREEMENT is made and entered into effective as of the 15th day of
June 2001, between The Xxxxx-Xxxxxxx Stores Corp., an Ohio corporation
("Employer"), and Xxxxxx X. Xxxxxx ("Executive").
WHEREAS, Employer and Executive are parties to that certain Employment
Agreement for Xxxxxx X. Xxxxxx dated as of December 30, 1997 (the "Employment
Agreement"); and
WHEREAS, Employer and Executive mutually desire to modify the provisions in
the Employment Agreement dealing with certain terminations of Executive's
employment with Employer.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is agreed as follows:
1. MODIFICATION OF SECTION 2.7(A) OF THE EMPLOYMENT AGREEMENT. Pursuant to
Section 5.5 of the Employment Agreement, Employer and Executive hereby modify
the terms of the Employment Agreement by deleting the existing Section 2.7(a),
which is titled "Termination Following a Change in Ownership," and replacing it
with the following:
(a) Termination Following a Change of Ownership. If (i) before the
second anniversary of a Change of Ownership Employer notifies Executive
that Executive is being terminated, and such termination is without Cause;
(ii) before the second anniversary of a Change of Ownership Executive
terminates his employment for Good Reason, (iii) Executive terminates his
employment with Employer for any reason, or without reason, during the
30-day period immediately following the first anniversary of a Change of
Ownership; or (iv) Executive's employment with Employer is terminated in
connection with but prior to a Change of Ownership and termination occurs
following the commencement of any discussion with any third party that
ultimately results in a Change of Ownership, Executive shall be entitled
(except as otherwise provided in paragraphs (b), (c) and (d) of this
Section 2.7 and subject to Section 5.1) to receive a lump sum payment as
severance compensation equal to 1.5 times his most recent Base Salary and
Bonus. Employer shall make such payment not later than 45 days after the
date of termination. If any payment made to the Executive pursuant to this
Section 2.7(a) or otherwise pursuant to or by reason of any other
agreement, policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or similar right, or
the lapse or termination of any restriction on or the vesting or
exercisability of any of the foregoing (a "Payment") is determined to be
subject to the excise tax imposed by Section 4999 of the Code (or any
successor provision thereto) by reason of being considered "contingent on a
change in ownership or control" of the Employer, within the meaning of
Section 280G of the Code (or any successor provision thereto) or to any
similar tax imposed by state or local law, or to any interest or penalties
with respect to such tax (such tax or taxes, together with any such
interest and penalties, being hereafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an
additional payment or payments (collectively, a "280G Gross-Up Payment").
The 280G Gross-Up Payment shall be in an amount such that, after payment by
the Executive of all taxes (including any interest or penalties imposes
with respect to such taxes), including any excise tax imposed upon the 280G
Gross-Up Payment, the Executive retains a portion of the 280G Gross-Up
Payment equal to the Excise Tax imposed upon the Payment.
2. MODIFICATION OF SECTION 2.7(C)(II) OF THE EMPLOYMENT AGREEMENT. Pursuant
to Section 5.5 of the Employment Agreement, Employer and Executive hereby modify
the terms of the Employment Agreement by deleting the existing Section
2.7(c)(ii), which is titled "Not for Cause," and replacing it with the
following:
(ii) Not for Cause. In addition to Employer's rights under Section
2.2, Employer may terminate the employment of Executive at any time for any
reason. However, if termination of Executive's employment does not occur
under the circumstances described in paragraphs (a), (b) or (c)(i) of this
Section 2.7, Employer shall remain obligated to Executive for (I) payment
of Executive's unpaid Base Salary (as described in Section 2.4) through the
then-remaining term of this Agreement pursuant to Section 2.2 or, if
longer, for a period of one year following Employer's termination of
Executive's employment, (II) any
Bonus (as described in Section 2.4) paid on or before Executive's last day
worked and (III) payment for any vacation accrued but unused as of before
Executive's last day worked.
3. NO OTHER CHANGES. With the exception of the revisions set forth in
Section 1 and 2 of this Modification Agreement, the remaining terms of the
Employment Agreement shall be unchanged and shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
THE XXXXX-XXXXXXX STORES CORP.
By: /s/ Xxxxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx
